More than a third of Scots now say household bills are ‘unaffordable’

Nearly three in four Scots are worried about unaffordable energy bills in 2022, with many admitting to cutting back on diets to cope, a new study finds.

A YouGov survey found that 70% of Scots fear bills will become less affordable by November 2022. More than one in five were very worried.

Some 36% of people already find their bills unaffordable.

And 54% of those people said they would cut household spending, with 56% of those people specifically cutting groceries.

Others have stopped eating out or ordering takeout so they can pay their high energy bills. Meanwhile, others have made a habit of driving less to save on gas, and even to cancel vacations and trips.

Citizens Advice Scotland has described the energy market as being in “crisis”, with several suppliers exiting the market and raising the cap on energy prices.

The figures come after a year of challenges in the energy market for consumers in 2021, with the price cap increasing twice and several suppliers exiting the market.

The energy price cap is expected to be lifted again in April and could mean another record increase in consumer bills.

The energy industry has warned that household gas and electricity bills could rise by up to 50% in the spring as the UK faces a ‘national crisis’ over soaring prices of fat.

The Energy UK trading body has called on the UK government to step in to help lower the cost of bills when the price cap could easily exceed £ 2,000 a year.

The UK’s price cap on energy bills, which prevents companies from immediately passing higher costs on to their customers, is due to change on April 1, when industry regulator Ofgem is expected to significantly raise the cap.

As wholesale energy prices continue to soar, the UK’s price caps on energy bills are preventing companies from immediately passing these costs on to their customers.

As of October 1, the price cap, set by the industry regulator Ofgem, has been set at a record £ 1,277.

In Scotland, some 1.5 million Scottish households have seen their energy bills soar to £ 139 after the latest price cap hike.

Households that use a default energy tariff to purchase gas and electricity received the large increase.

The sharp 12% increase is due to a more than 50% increase in wholesale fuel prices, with gas prices reaching an all-time high as global economies recover from the COVID-19 crisis, according to Ofgem.

Citizens Advice Scotland who commissioned the latest research when launching Big Energy Saving Winter, a campaign to encourage people to get advice on dealing with rising energy bills.

Research in November asked more than 1,000 Scots if they feared energy bills would become less affordable over the next 12 months. Only 20% said they weren’t very worried and 5% said they weren’t at all worried, while 4% said they didn’t know and 1% preferred not to. to say.

CAS Fair Markets spokesperson Kate Morrison said: “After a tough year for consumers in 2021 when it comes to energy costs, people are bracing for a tough year in 2022.

“People have already experienced two tough price hikes in the past twelve months, and all the evidence points to more record hikes this coming year. That, together with rising inflation more generally, will cause real hardship for some people.

“It’s also important to note that people are concerned that bills will become more unaffordable – which doesn’t just mean higher bills, but more difficult household budgets in general, from rising prices in stores to decline or stagnation of income. ”

Monday January 3: The mountain of EXC SCOTLAND board tax debt hit record levels, rising sharply by nearly 50% in one year as concerns grow of a credit crunch during the coronavirus pandemic.

Official figures seen by the Herald show that in 2020/21 the amount of council tax that remained unpaid stood at £ 139.552million as of March 31, 2021.

Last year, before the pandemic hit, municipal tax debt stood at £ 95.4million, an increase of almost 25% from the previous year.

The amount currently owed in housing tax, which has led to the prosecution of tens of thousands of households, would have been affected by the economic effects of the Covid-19 pandemic, the councils having limited the debt collection processes to avoid to contribute to the financial pressure on municipal taxpayers.

The boards reported that repayment terms had been put in place, in many cases over a longer period.

In some cases, municipal taxpayers have arrangements that enter into the current year with the pursuit of tax recovery.

But Citizens Advice Scotland now fears that city council tax debt will grow even further in 2022, as the economic effects of the end of holidays, rising prices in stores, cuts in universal credit and soaring energy prices are hitting hard.

They say this will lead to a financial squeeze for more people, which will put extreme pressure on household decision-making about bills to pay, including council tax.

Municipal tax debt is currently the number one debt problem the Citizens Advice Bureau network sees.

Analysis of figures for 2020/21 reveals 1,422 people have sought help from the Citizens Advice network for a complex debt issue involving house tax, due to a cumulative total of £ 4.1million sterling in arrears of council tax.

The CAS said “worryingly” that the average debt was £ 2,925.84 – almost three times the average municipal tax bill of £ 1,198.

Figures from the first two quarters of 2021/22 show that figure is even higher, with average debt of £ 3,513.01 and total debt of over £ 3.5million.

Overall, this means CAS customers have incurred more than £ 7.6million in tax debt during the pandemic.

The CAS calls on people to use the Scottish Government’s municipal tax reduction program which can help reduce future payments. For some people, it can also provide a back date of up to six months.

CAS Financial Health spokesperson Myles Fitt said: “This is a really tough winter for so many families across Scotland. The combination of rising energy bills, the income impact of the end of the holiday, and the weekly £ 20 reduction in universal credit created a perfect financial storm for the thousands of households already in trouble. money or who just managed to get by. .

“Council tax debt is the biggest debt problem the Citizens Advice network in Scotland sees, and people have racked up millions of pounds in arrears during the pandemic. Worryingly, the first data for 2021/22 suggests that this problem is getting worse – and this is before the perfect storm of rising costs and falling income hits people. ”

According to official figures, the local authority with the biggest headache when it comes to collecting municipal taxes remains the city of Aberdeen, which did not collect 8.1% of what was billed after being given a rate. 6.4% last year.

They were followed by North Ayrshire and Glasgow City (7.9%), East Ayrshire (6.8%), North Lanarkshire (6.7%) and Dundee City (6.3%).

The council with the best collection record for a second year in a row is Stirling which failed to collect 2.9% of the council tax billed, followed by Shetland (3%), Angus (3.1%), East Dunbartonshire (3.3%), Perth and Kinross (3.4%) and East Renfrewshire (3.6%).

It comes as the Scottish government said earlier this month it would lift restrictions on municipal tax increases next year, ending a flagship policy the party has pursued since taking the control of the decentralized government in Edinburgh in 2007.

Since 2007, the SNP has frozen or controlled increases in housing tax rates. Scottish local councils have complained strongly in recent years about struggling to fund vital services.

But Cosla, the body representing the Scottish councils, warned that next year’s funding settlement would be ‘disastrous’ for communities and essential services have been left in a ‘precarious position’.

Councilor Gail Macgregor, her resource spokesperson, said the funding outlined in Ms Forbes’ Scottish budget represented a reduction of £ 100million.

But Ms Forbes said she insisted the spending plan offers “real growth” for the boards.

She added: “This protects the core budget in terms of cash flow and also ensures that local governments receive a fair share of the health and social care consequences, which they have long been calling for.”

A Scottish government spokesperson said: ‘The average tax bill for councils across Scotland is lower than other countries in the UK. The housing tax places an important administrative and financial responsibility on each local authority and is an essential element in the financing of local public services.

“Councils have a range of actions they can choose to take if someone is unable to pay their council tax. These include discussing and agreeing to payment plans.

“The Council Tax Reduction Scheme exists to prevent people from taking on municipal tax debt. People having difficulty meeting their council tax payments should contact their local authority to find out if they are eligible for a reduction which can be backdated up to six months.

“Currently, more than 475,000 households benefit from a certain reduction in the housing tax (CTR). A reduction can be up to 100%, and beneficiaries save on average over £ 750 per year.

“Enforcement measures are also open to municipalities, including legal action when a household has chosen not to pay the housing tax it owes. ”

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